Replies to post #129703 on Biotech Values

[jq1234]

I went back to read Goldman report from Dec2010. Their estimate of contract change due to other generic entry was well below what MNTA is going to get:

Duopoly is important, as economics change significantly with more competitors
Under Momenta’s contract with Novartis, there are three competitive scenarios that carry
different economics for Momenta. Continuation of the current market dynamics, in which
MNTA has the only approved generic, holds the best economics for the company (45%
profit share). In the event that Sanofi launches an authorized generic, Momenta would
receive a royalty on sales up to a certain threshold, and a profit share thereafter, according
to the contract. While exact economics have not been disclosed, we estimate Momenta
would receive a 10% royalty up to $1bn in sales and a 30% profit share thereafter. In the
final scenario, if third-parties launch generic versions of Lovenox, Momenta would only
receive a high single-digit royalty on sales (we estimate 8%) of a potentially smaller market,
as generic pricing generally deteriorates with multiple competitors.

http://208.78.96.220/GoldmanMNTA.pdf

I also remember NVS is supposed to pay back portion of MNTA's share of development cost after other generic entry. Does this apply to authorized generic?

[rajaram46]

Do you still see a settlement as the most likely outcome?